Neel Kashkari will be the next Minneapolis Fed president
In a statement, the Minneapolis Fed said Kashkari will take the role on January 1 following the retirement of current president Narayana Kocherlakota.
Back in 2008, Kashkari was appointed by then-Treasury Secretary Henry Paulson to oversee TARP - or the Trouble Asset Relief Program - following the financial crisis.
Kashkari then went to PIMCO following his stint at Treasury and left PIMCO in early 2013. Kashkari ran for governor of California in 2014.
Before joining Treasury, Kashkari was at Goldman Sachs.
Kocherlakota was one of the hawkish Fed presidents back in 2009 and is now by far the most dovish Fed voice.
In an email following the news, Neil Dutta, an economist at Renaissance Macro, said, "If Kashkari uses the Minneapolis Fed Department to inform his views of policy, I'd think he would be somewhat more hawkish than the consensus in the FOMC."
That is, Kashkari - who will be a voting member of the Federal Reserve's Federal Open Market Committee, which votes on policy - could push for more aggressive interest rate increases (or be more reluctant to vote for interest rate cuts in a future easing cycle).
Here's the full statement from the Minneapolis Fed:
November 10, 2015- The Federal Reserve Bank of Minneapolis announced today that Neel Kashkari has been appointed its 13th president and chief executive officer, effective Jan. 1, 2016. Narayana Kocherlakota will end his tenure as president and CEO on Dec. 31. Kocherlakota has led the Federal Reserve Bank of Minneapolis since 2009 and announced in December 2014 that he would not seek reappointment following the conclusion of his term in February 2016.
As president of the Minneapolis Fed, Kashkari will participate on the Federal Open Market Committee in the formulation of U.S. monetary policy. He will oversee 1,100 employees in Minneapolis and Helena, Mont., who conduct economic research, supervise financial institutions and provide payments services to commercial banks and the U.S. government, along with other supporting activities.
Kashkari, 42, has had a varied career spanning both the private and public sectors. In the private sector, he was most recently managing director and member of the executive office at PIMCO. In January 2013, he resigned from the firm to explore a run for public office. One year later, he announced his candidacy for governor of California. He came in second in California's nonpartisan blanket primary, but lost the general election to incumbent governor Jerry Brown.
Prior to joining PIMCO in 2009, Kashkari served in the U.S. Department of the Treasury from 2006 to 2009, first as senior adviser to Secretary Henry Paulson and then as assistant secretary of the Treasury. In the latter role, he established and led the Office of Financial Stability and oversaw the Troubled Asset Relief Program (TARP) for both Presidents George W. Bush and Barack Obama.
Before joining the Treasury Department, Kashkari was a vice president at Goldman Sachs in San Francisco. Previously, he was an aerospace engineer at TRW Corp.
Kashkari holds an MBA from the Wharton School of the University of Pennsylvania and bachelor's and master's degrees in mechanical engineering from the University of Illinois at Urbana-Champaign.
"The class B and C directors were unanimous and enthusiastic in appointing Mr. Kashkari to be the next president and CEO of the Federal Reserve Bank of Minneapolis. Mr. Kashkari is the right person to build on the Minneapolis Fed's core strengths and successfully lead the Bank into the future," said Randall Hogan, chairman of the Minneapolis Fed's board of directors and co-chair of the search committee.
"Mr. Kashkari is an influential leader whose combined experience in the public and private sectors makes him the ideal candidate to head the Minneapolis Fed," said MayKao Hang, incoming chair of the Minneapolis Fed's board of directors and co-chair of the search committee. "We were fortunate to have outstanding candidates during our national search. Mr. Kashkari stood out because of his inspiring leadership skills, solutions-oriented nature, collaborative style and deep commitment to public service," she added.
"I am truly honored to have the opportunity to lead the Federal Reserve Bank of Minneapolis. I look forward to working with the Bank's dedicated staff and continuing the Bank's long-standing tradition of excellent service to the Ninth Federal Reserve District and to the nation," Kashkari said. "The Minneapolis Fed has built a strong reputation for economic research and thought leadership as well as excellence in Bank operations. I am delighted that I will be working with the Federal Reserve Bank of Minneapolis team to build on the Bank's many achievements."
The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation's central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations and provides a variety of payments services to financial institutions and the U.S. government.